New Zealand's insurance sector is operating in a talent market that is compressed from both ends. Experienced professionals are retiring or crossing the Tasman, and junior candidates are either not entering the industry in sufficient numbers or not being hired when they do. The skills gap that results is not a future risk — a point quantified annually in Gallagher Bassett's Carrier Perspective: 2026 Claims Insights, which covers Australia, the UK, and North America and finds talent the top-three challenge across every market surveyed. It is a present operating challenge, recognised across the region in research including the Insurance Council of Australia's six-year Talent Roadmap, which has implications for New Zealand brokers and insurers operating across both markets.
Hays data shows that 85% of hiring managers in Australia and New Zealand have skills gaps, and in New Zealand those gaps are especially pronounced in financial and insurance services, where 51% of employers report them. New Zealand's talent challenge is compounded by the relative shallowness of the local labour market — with roughly 5 million people, the country simply has fewer qualified candidates to draw on than its Australian counterpart, and the pipeline from universities and professional training programmes into insurance roles has never been deep.
The standard explanation for declining junior hiring is AI. Generative tools that can automate the routine analytical and administrative work that graduates once performed are assumed to be rendering entry-level positions economically marginal. But a major new working paper — published in May 2026 by researchers at the University of Warwick, the London School of Economics, and Oxford's Ellison Institute of Technology - challenges this directly. Drawing on 243 million new hire records and 407 million job postings across four Anglophone economies between 2017 and 2025, the study finds that when the effects of AI exposure and working-from-home exposure are properly disentangled, the WFH effect holds and the AI effect disappears. The paper's name — The Broken Ladder - describes exactly what New Zealand insurance employers are navigating.
Junior hiring decline, 2017–2025
Junior share of new hires has fallen sharply across all four countries
Percentage-point change from 2019 baseline — United States, United Kingdom, Canada, Australia
Dashed lines mark COVID-19 onset (Q1 2020) and ChatGPT release (November 2022). Series are quarterly, seasonally adjusted, reweighted to hold occupation mix constant at the 2019 US distribution. Source: Lambert & Schindler (2026), The Broken Ladder; Revelio Labs.
The Rising Stars 2025 profiles from Insurance Business illustrate what the sector's talent pipeline looks like when it is functioning well - and how much the informal apprenticeship model matters. One featured young professional in New Zealand described the defining experience of his career as going from the most junior team member to running the liability function solo, forced to lean on other parts of the business, work with executives on strategic initiatives, and onboard a new senior broker while managing his own workload. That experience of immersion - where proximity to senior colleagues provides direct observation of how experienced professionals handle complexity - is precisely what distributed working arrangements disrupt most severely.
According to Stats NZ, 34% of employed New Zealanders worked from home either part-time or regularly as of 2025. That figure has held broadly stable since 2022 and is not returning to pre-pandemic levels. New Zealand's workforce is, in effect, permanently operating under hybrid conditions - and the insurance sector, as a knowledge-intensive, white-collar profession, is among the most thoroughly affected. The Lambert-Schindler paper's WFH and GenAI exposure indices would both rank insurance near the top for New Zealand occupations.
New Zealand employers are already being forced to rethink hiring as talent heads offshore, with experienced professionals leaving for Australia and the United Kingdom where career pathways and compensation often look more attractive. This outward flow of experienced professionals shortens the internal career ladders that junior staff would normally be climbing - and reduces the senior capacity available for mentoring and development.
The Lambert-Schindler paper's central mechanism is directly applicable to insurance in a way it may not be in other industries. The paper shows that firms hire junior workers not only for their immediate productivity but as an investment in the experienced professionals they will become.
That investment depends on mechanisms for knowledge transfer that proximity enables: watching how a senior broker navigates a difficult conversation with a client, how an underwriter handles a complex property risk, how a claims manager weighs a disputed liability. These are not skills that can be transmitted through an online learning module.
Insurance is an apprenticeship industry. The most reliable pathway to becoming a skilled underwriter, broker, or claims professional has always run through observation, imitation, and gradual assumption of responsibility under the guidance of someone more experienced. That pathway is significantly degraded when the senior professional is working from home on Mondays and Fridays and the junior staff member is doing the same.
Aon's 2025 Human Capital Employee Sentiment Study found that 60% of employees in APAC markets are considering changing jobs within the next year, citing workplace flexibility as a leading driver - but also finding that for Gen Z workers, work-life balance now ranks just below health coverage in importance, surpassing career development. This suggests younger insurance professionals may be trading proximity-based development for flexibility, often without fully understanding the cost to their own career progression. The employer's challenge is to design working arrangements that provide both - rather than leaving junior staff to absorb the implicit costs of distributed work without the explicit benefits of structured development.
The Lambert-Schindler paper makes a methodological argument with immediate practical consequences. Most studies linking AI to junior hiring decline are based on occupation-level exposure designs that measure which roles are most susceptible to AI automation. Those same roles - analytical, knowledge-intensive, computer-mediated - are also the roles most susceptible to WFH adoption. When both exposures are measured separately, both appear to predict falling junior hiring. When they are measured together, the WFH effect survives and the AI effect collapses.
For New Zealand insurance employers, this means the explanation most commonly offered for junior hiring decisions - we have fewer graduate roles because AI is doing entry-level work - may be a rationalisation of a different dynamic. Firms may be hiring fewer junior staff because the conditions that made developing junior staff tractable have been removed by hybrid arrangements, and the organisation has not yet rebuilt the infrastructure to compensate.
The practical test is straightforward: does your firm's junior hiring decline track most closely with the teams and functions that went hybrid earliest - or with those deploying AI tools most aggressively? In most New Zealand insurance operations, the correlation is likely to be more illuminating than expected.
New Zealand's insurance sector is small enough that individual firms' decisions about early-career development aggregate quickly into an industry-wide outcome. If every firm concludes that junior hiring is economically marginal under hybrid working, the pipeline dries up. The senior leaders of 2035 will not exist, because the junior hires of 2025 were never made.
The Lambert-Schindler paper's message is that this outcome is not inevitable, because its cause is not technological but organisational. Several immediate steps follow from the evidence.
First, explicitly differentiate hybrid policies by career stage. The expectation of predominantly in-person attendance in the first two years of an insurance career is educationally defensible and professionally important. It is also a commitment to the junior employee's development, not a curtailment of their autonomy. Most young professionals, when the rationale is clearly explained, understand the difference.
Second, invest in structured mentoring as a formal business process, not an informal goodwill gesture. The Rising Stars profiles consistently show that mentoring relationships - the CBN Mentor and Mentee Programme, NIBA's programmes, individual firm mentoring schemes - are the primary mechanism through which junior professionals in New Zealand insurance develop the judgment and confidence that makes them valuable. Those programmes require senior time and organisational commitment. Under hybrid arrangements, that commitment must be made deliberately rather than incidentally.
Third, recognise that the talent shortage and the training difficulty are the same problem. The looming talent gap across more than 170 occupations identified by research through 2032 reflects a structural supply problem that the insurance sector cannot solve through recruitment alone. Developing the junior staff you do hire - giving them the proximity, mentoring, and immersive experience that insurance expertise requires - is the only durable answer to a market where experienced professionals are scarce and getting scarcer.
New Zealand's insurance industry - supported by bodies including IBANZ (the Insurance Brokers Association of New Zealand) - has always punched above its weight in producing skilled professionals relative to the size of the market. That capacity depends on an apprenticeship model that hybrid work is quietly eroding. Naming that dynamic correctly - rather than attributing it to AI - is the first step toward reversing it.
Peter John Lambert is at the University of Warwick and the London School of Economics. Yannick Schindler is at the Ellison Institute of Technology, Oxford. The Broken Ladder: AI, Remote Work, and Early-Career Hiring was circulated in May 2026. Insurance-specific data sourced from Hays, Aon 2025 Human Capital Employee Sentiment Study, Stats NZ, and cited Insurance Business New Zealand reporting.
